This paper discusses three scenarios concerning China’s recent trade negotiations and relations with the United States and the European Union. Chinese commentators and academics are sure that their country ‘is firmly on the path of greater integration with the global economy’ and that this is ‘a path that has provided great benefits for China and for the world in general.
However, they are also be well aware of the problems associated with entering a global economy where free trade/level playing field market principles have not ended either agricultural subsidies or import quotas on manufactured goods. Indeed, as argued in this paper, measures taken in the name of neo-liberal free market ideals have, ironically, spawned an ever-growing mass of quotas imposed by the EU and the US on the importation of Chinese clothing, footwear and textiles.
Keywords: China, subsidiaries, WTO, USA, EU

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Limits on Economic Harmonization in The United States and The European Union

Sweeney, Richard J.(København, 2003)

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The U.S. Constitution importantly limits the degree to which the federal government
can impose harmonization across member states. This paper reviews these limitations and
how they have evolved substantially over time in the U.S. It also discusses some of the
benefits and costs of such limitations, and argues that the EU may benefit from adopting
similar limitations. Harmonization of EU tax codes is likely to be economically harmful. On
theoretical grounds, tax rates are likely to be harmonized at a common rate that is higher than
optimal for the EU. This suggests the benefits of constitutional provisions that make tax
harmonization difficult to impose. Other types of harmonization have a less clear-cut costbenefit
analysis. A federal commercial code that is uniform across member states reduces
transaction and information costs, compared to leaving important code issues to member
states; further, many states may keep codes for long periods that are sub-optimal compared to
a given federal code. A federal code may, however, fit poorly with other institutions of
member states, potentially causing large costs. Leaving codes to the states leads to
competition across states, and may generate forces for change for the better. Competition also
generates information about the effectiveness and costs of different commercial codes.
Because any country’s initial code is likely to be sub-optimal, and is likely to become less
optimal over time, information on how to improve codes is valuable. Likely it is easier to
learn and adapt from member states than from other countries.

This article examines why Members of the European Parliament (MEPs) in 2001 turned
down a proposal for an EU take-over directive? The first explanation focuses on party
ideology. However, MEPs overwhelmingly voted according to national rather than party
lines. Two additional explanations emphasise national characteristics: labour market
legislation (national schemes to protect employees against dismissals) and corporate
governance issues. Labour market legislation can explain the UK and German MEP votes
but not the Swedish and French MEPs votes. These votes can be explained by
emphasising measures against take-overs such as a high level of market capitalisation and
unequal voting rights.

A constitution is more likely to be accepted if it federalizes those issues that are
widely seen as needing complete harmonization. A constitution is more likely to endure if the
federal government does not have powers that are not vital to it but which may alienate some
member states to the point that the federal government loses legitimacy. It appears vital to
have trade policy at the European Union level; for euro countries, monetary policy is already
federalized. It is not clear that common foreign and defense policies are needed; insisting on
common foreign and defense policies may lead to conflicts within and across member states
that severely weaken the Union, conceivably contributing to eventual collapse. Insisting on
harmonization of commercial codes does not have the destructive potential of attempting
completely to harmonize defense and foreign policies; it may, however, lead to needless
conflict that helps drain the reservoir of goodwill that the European Union will need for
dealing with other conflicts amongst member states.

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a case study of the implementation of the EU eigth directive in Denmark 1984-2003

Loft, Anne; Jeppesen, Kim K.(København, 2003)

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This paper analyses the complex process through which EU's Eighth Company Law Directive on the qualification of statutory auditors (1984) was implemented in Denmark. The Directive envisaged one group of ‘statutory auditors’ in each member state. However, in Denmark there were two groups of auditors: the state authorised auditors who had a long education and high status, and the registered auditors who had a shorter education, lower status and whose clients were mainly medium and small sized businesses. An exemption was made in the Directive to allow the registered auditors to continue to audit despite that they did not have the required ‘university level’ education. This made the issue of education central to the long-term survival of the registered auditors and it consequently became the object of a long conflict between the parties with an interest in auditor education and qualifications: the profession, the state and the educational institutions.
This case illustrates the processes of audit regulation in a small European state with a highly developed economy where auditors are approved and regulated by the state but through processes heavily influenced by the profession. It provides an interesting contrast to other studies carried out on the implementation of this Directive, e.g. in the UK (Cooper et al, 1996) and in Greece (Caramanis, 1999), and perhaps some insight into the difficulties which may be encountered in implementing the new Eighth Directive proposed by the Commission in May 2003.
Key Words:
EU; Eighth Directive; accounting profession; Denmark; harmonisation; regulation.

This report maps research in institutional economics in management science in the European Union for the 1995 to 2002 period. The reports applies Internet search based on a university listing, search on journal databases, key informants and an internet-based survey. 195 researchers are identified. In (sub-)disciplinary terms, organization, strategy, corporate governance, and international business are the major areas of application of institutional economics ideas. In terms of countries, the EU strongholds are Holland, Denmark, UK, and Germany. There is apparently no or very little relevant research in Ireland, Portugal, Luxembourg and Greece. Based on the findings of the report, it seems warranted to characterize the EU research effort in the field as being rather dispersed and uncoordinated. Thus, there are no specialized journals, associations or PhD courses. This state of affairs is partly explainable by the highly pragmatic way in which research in management science is typically conducted (so that institutional economics approaches are likely to be merely one type of input among many). Keywords Institutional economics, management science, European union.

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If secession or expulsion ends in a "velvet divorce," as with Czechoslovakia, costs are
minimal and the split is relatively unimportant. High costs arise if a federation splits into mutually
hostile, comparably sized regions. Perhaps the majority of splits lead to dangerous hostility. A
well-designed constitution minimizes the likelihood of hostile splits by limiting the issues that are
dealt with at the federal level, by providing checks and balances, and by establishing due process
under the rule of law. Preventing the conditions under which a hostile split may arise is more costeffective
than trying to optimize the terms of a split or to find last-minute compromises to
forestall the split.

The post-Civil War reconciliation between the North and the South is a very rare event
in the history of civil wars. The South was thoroughly beaten. Top generals, particularly Robert E.
Lee, saw further fighting as "useless effusion of blood." There was no call by top Confederate
leaders for continuing the fight with the type of bushwacking that occurred in Missouri and
Kansas. Reconstruction is often thought of as harsh, but compared to the standards of history
Confederates were by and large treated well after the Civil War. Within a decade or so of the end
of the Civil War, conservative white elites had established political, economic and social
dominance in the South. They had lost their "slave property" and the "government of our own."
They could never get back slavery, and a government of their own was not worth fighting for.
There was little reason for the kind of persistent low-level guerilla warfare that often occurs after
civil wars, or the organization of a succession of rebellions.

Because the conflicts that led to the American Revolution mainly arose from
constitutional issues, the history of these conflicts offers lessons for the design of the new
European Union constitution. One lesson is the importance of avoiding needless conflicts
between federal and member-state governments. In particular, forcing decisions on where
sovereignty lies may cause great conflict. Another lesson is that a federal system depends on
good will among the federal and member-state governments, and because this good will is easily
dissipated, efforts should be made to nurture it. Federal exercise of power will often alienate
member states; thus, a sensible strategy is to grant the federal government only the minimal
powers that a strong consensus agrees it must have, and to change these powers only by strong
consensus. Removing "democratic deficits" may not be sufficient in many cases to give
legitimacy to exercise of federal power; minorities may require protection by constitutional
limits on federal powers.